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EU Emissions Trading System (EU ETS) regulation will be made easier for UK industry to comply with, as a result of proposals published today on cutting out ‘red tape’.

Government has today launched a consultation on a single regulatory instrument for Phase III of the EU ETS, replacing 13 sets of regulation with one.

For the UK the EU ETS remains the primary means by which we will meet our ambitious carbon emission reduction targets in the EU, and will help deliver two-thirds of required emissions reductions after 2012.

The aim is to simplify the legal requirements for UK EU ETS participants, from 2013. This is the first major change proposed to legislation by DECC as a result of the ‘red tape challenge’ environment theme.

The UK also plans to offer small emitters and hospitals the opportunity to ‘opt out’ from 2013 into a lighter touch alternative scheme. This will address the disproportionately higher administrative burden faced by these installations per tonne of CO2 emitted*.

The UK will also move to an enforcement system comprising solely of civil, rather than criminal sanctions.

Greg Barker, Minister of State for Climate Change, said:

“We have worked closely with industry to develop sensible proposals that will genuinely save companies money and time, while still allowing them to meet environmental goals.

“Under the proposals smaller businesses, who experience higher costs from complying with the current regulations, will also be able to opt out of the system from 2013”.

Dr Anne-Marie Warris, chair of the UK’s Emissions Trading Group said:

‘The ETG welcomes the UK Government’s efforts to achieve regulatory simplification in relation to the UK transposition of Phase III of the EU Emissions Trading System. We shall be encouraging our members to respond to this consultation and will be continuing our discussions with Government on the development of their simplification proposals.’

The revised regulations will take effect from January 2013, the start of Phase III of the EU ETS.

Notes for Editors

Phase III of the EU ETS starts in January 2013. In preparation, Government has been revising existing UK regulations that implement the EU ETS in the UK to ensure that the legislative framework is in place to give force to new EU ETS provisions that take effect from 2013. At the same Government has sought to reduce the complexity and regulatory burden of EU ETS regulation on operators.

The ‘red tape challenge’ is a Government wide campaign to work in partnership with the public to cut out unnecessary red tape in order to save businesses money and time.

*Administrative costs for small emitters are estimated at over £1/tCO2, while large emitter costs are estimated to be £0.04/tCO2.

Current criminal sanctions will be replaced with civil equivalents; penalties will be dissuasive but proportionate. Moving to a penalties system with civil sanctions provides the scope to introduce discretion to allow the regulator (rather than the courts) to moderate the action it might take.

The consultation seeks views on the proposed revisions to existing UK regulations which provide the legislative powers for implementation in the UK of the EU Emissions Trading System (ETS)

The revised regulations will take effect from January 2013, the start of Phase III of the EU ETS.

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